Exhibit 10.26
NONNEGOTIABLE
PROMISSORY NOTE
$250,000 Cdn. Issued: August ___, 2000
Principal Amount Maturity Date: August ___, 2003
FOR VALUE RECEIVED, Solpower Corporation, a Nevada corporation, or its
designee ("Maker"), hereby promises to pay to Pico Holdings, Inc., a Delaware
corporation ("Payee"), the principal amount ("Principal Amount") of Two Hundred
Fifty Thousand Dollars (Cdn.$250,000) according to the following terms and
conditions. This instrument is not negotiable or assignable by Payee except to a
Permitted Transferee as defined below. All references to currency herein refer
to Canadian Dollars.
1. PAYMENT SCHEDULE.
All unpaid portions of the Principal Amount of this Note shall be due
and payable on August ___, 2003 (the "Maturity Date").
2. ADJUSTMENT AND PREPAYMENT.
(a) To the extent that the purchase price set forth in the Share
Purchase Agreement dated August 21, 2000 among the Maker, the Payee, James W.
Flowers, Patricia G. Flowers, Florcor, Inc. and Protocol Resources Management
Inc., an Ontario corporation, is reduced pursuant to Section 2(e) of such Share
Purchase Agreement or otherwise, the Principal Amount of this Note shall be
reduced by the same amount ("Adjustment") and such Adjustment shall be treated
as a prepayment of this Note as set forth in Section 2(b) below.
(b) The Maker shall be entitled at any time to prepay any or all of
the Principal Amount without penalty upon thirty (30) days written notice to
Payee. Any prepayment shall be credited first to the aggregate unpaid Principal
Amount and any Adjustment in the Principal Amount of the Note pursuant to
Section 2(a) shall be treated as a prepayment on the date that the Adjustment
was made.
3. DEFAULT. For purposes of this Note, a "Default" shall be deemed to have
occurred upon any of the following events:
(a) A failure by Maker to pay any Principal Amount owing under this
Note when due on the Maturity Date;
(b) A failure by Payee to effect the Adjustment in accordance with
Section 2; or
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(c) Maker shall make an assignment for the benefit of creditors, or if
a receiver of Maker's property shall be appointed, or if a petition in
bankruptcy or for the reorganization under any Chapter of any Federal or State
Bankruptcy Act or other similar proceeding under law for relief of debtors shall
be filed by or against Maker, or if any lien of attachment, execution, lien, or
claim of lien be placed against all or any portion of the assets of the Maker
and is not cleared from the record or reasonably bonded against within ninety
(90) days after it has been filed; unless
(d) Any such failure or action by Maker under Sections 3(a) and (b)
shall not have been cured within thirty (30) days of receipt of a notice from
Payee specifying the alleged Default or failure; and
(e) Provided, however, that no delay or omission on the part of Payee
in exercising any right hereunder shall operate as a waiver of such right or of
any right under this Note. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion. Except as
set forth in this Section 3, Maker hereby expressly waives any presentment,
demand, protest, notice of protest or other notice of any kind and hereby
expressly waives and covenants not to assert any appraisement, stay, extension,
redemption or similar laws, now or at any time hereafter enforce, which might
delay, prevent or otherwise impede the enforcement of this Note.
4. ASSIGNMENT. The rights and obligations of the parties hereunder shall
not be assignable by either party without the consent of the other except Payee
may assign its rights to a Permitted Transferee. For purposes hereof a Permitted
Transferee, shall be a corporation, partnership or other entity, which is a
successor by will, or other testamentary or non-testamentary transfer to a trust
for the benefit of the individual transferring Payee or by merger,
reorganization, consolidation or similar corporate transaction involving any of
the Payees or in the case of the dissolution or liquidation of a non-individual
Payee, the successor to the Payee or the previous Permitted Transferee pursuant
to the corporate laws of the state of the formation of the transferring entity.
To the extent such assignments are allowed, the provisions of this Note shall be
binding upon and inure to the benefit of the parties hereto and their respective
designees, heirs, legal representatives, successors and assigns, to the extent
provided herein.
5. COSTS. Maker shall pay, on demand, any and all costs and expenses,
including reasonable attorneys' fees, incurred by Payees in connection with a
Default and the collection of any portion of the Principal Amount and Interest
accrued thereon.
6. OFFSET. The amounts due under this Note are not subject to reduction or
offset for any claims of Maker or its successors or assigns against any of the
Payees or any third party.
7. NO CONTINUING WAIVER. The waiver of a Default shall not constitute a
continuing waiver or a waiver of any subsequent Default. Maker hereby waives
presentment, demand, dishonor and notice of nonpayment.
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8. NOTICE. All notices, requests, consents and other communications which
may be desired or required hereunder shall be in writing, and shall be deemed to
have been duly given on the date of delivery if delivered in person to the party
named below, or three (3) days after mailing if deposited in the United States
mail, first class, registered or certified mail, return receipt requested, with
postage prepaid, addressed as follows:
Payee: Pico Holdings, Inc.
875 Prospect Street
Suite 301
La Jolla, CA 92037
Attn: Peter Wood
Telecopier: 858-456-6172
With a copy to: General Counsel
Pico Holdings, Inc.
875 Prospect Street
Suite 301
La Jolla, CA 92037
Telecopier: 858-456-6172
If to Maker: Solpower Corporation
7309 East Stetson Drive
Suite 102
Scottsdale, AZ 85251
Attn: Mr. Mark Robinson
Telecopier: 602-947-6324
With a copy to: Brand Farrar & Buxbaum LLP
515 South Flower Street
Suite 3500
Los Angeles, CA 90071
Attn: Margaret G. Graf
Telecopier: 213-426-6222
10. SEVERABILITY. If any provision of this Note or the application thereof
to any person or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Note and the application of any such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
11. INTERPRETATION OF DOCUMENT. The parties hereto acknowledge and agree
that this Note has been negotiated arms length and between parties equally
sophisticated and knowledgeable in the matters dealt with in this Note. Each
party has had access to counsel of their selection. Accordingly, any rule of
law, court decision or other legal precedent that would require interpretation
of any ambiguities in this Note against the party that has drafted it is not
applicable and is waived.
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12. GOVERNING LAW AND VENUE. This Note and the rights and obligations of
the parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of Nevada,
without giving effect to the choice of law principles thereof.
SOLPOWER CORPORATION,
a Nevada corporation
By: /s/ Mark Robinson
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Name: Mark Robinson
Title: President and Chief Executive
Officer
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